WHOLESALE London prices for physical gold jumped $15 from a drop to $1384 per ounce Tuesday morning, gaining after the Interfax news agency in Russia – political ally of Syria's President Assad – reported two "objects" being fired in the Mediterranean, towards the sea's eastern coast.

The gold price then fell back only to rise and touch $1400 for the first time this week – 2.5% below last Wednesday's 3-month high – as Israel confirmed the launch, saying it was done to test what Reuters calls a "US-funded" anti-missile system.

"As long as Syria stays quiet, I would rather sell rallies [in the gold price] at the moment," says David Govett at brokers Marex.

But "we would also expect the metal to find support on pull backs," says Walter de Wet at Standard Bank in London, "not only because Asian demand is likely to improve with gold below $1400, but also because geo-political risk around Syria remains high and oil prices elevated.

Holdings have since stabilized some 25% below end-2012's record levels.

Over in Asia and the Middle East notes Commerzbank's commodity research team, "Physical gold buyers who had hugely stepped up their purchases after the price collapsed in the spring, appear to be acting opportunistically and with great price sensitivity.

Reviewing last week's pop above $1430 per ounce as the UK and US debated immediate action against Syria's Assad regime for an apparent chemical weapons attack on civilians, "If air strikes take place gold could well fall," writes Jonathan Butler at Mitsubishi, "and if this takes place against a backdrop of QE tapering, the downwards correction could be sharp."

The US Federal Reserve is widely expected to announce a reduction of its $85 billion-per-month QE program at its policy meeting in two weeks' time.

Meantime, the gold price "should be well supported in the coming days," says Butler. "But Friday’s US payroll data may be negative for gold, however."

Asian stock markets rose overnight, with Japan's Nikkei adding 3% and the Shanghai index now regaining half of June's 15% plunge after new data indicated lower new order for China's manufacturers, but strong expecations for the future.

European stock markets held flat overall. Both the Euro and Sterling slipped against the Dollar.

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich or Singapore for just 0.5% commission.

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